TaxTMI 
TaxTMI 
2025 (6) TMI 942
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....de by AO u/s.68; Rs. 40,51,063 is sale proceeds of listed shares in Stock Exchange (i.e., 49,500 shares of Quest) from DMAT account through registered share broker; 49,500 shares of Quest received on amalgamation on 22-2-12 from undisputed investment of 550 listed shares in Dristi made in earlier year in AY11-12 (purchased on 13-11-10) as Id CIT(A) has duly accepted cost of purchase of 550 shares of Dristi at Rs. 2,75,000 and sustained remaining amount of Rs. 37,76,063; sec68 cannot be applied on sale proceeds of investments; addition sustained of Rs. 37,76,063 is unjustified & is liable to be deleted; relied on Vikram N Chandan (2024) (Mum-Trib); Pardeep Kumar Aggarwal (2016) (Chd-Trib); Mamta Rajiv Kumar Agarwal (2023) (Guj HC). 2. On t....
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....tificates issued in name of assessee on 30-11-10 on his request made on 20-11-10 and it thereafter, converted into 49,500 shares of Quest on 22-2-12 on amalgamation and thereafter, it was sold on 5-6-12, thus, holding was for 19 months; pre-condition for claiming exemption u/s.10(38) has been duly complied with; addition sustained is liable to be deleted. 5. The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing." 2. The brief facts in this case are that the addition has been made by the A.O u/s.68 of the Income Tax Act, 1961 (for short 'the Act') for claim of Rs. 40,51,063/- on account of bogus Long Term Capital Gain (LTCG) and the facts emanating at Para 5.14 of the assessment o....
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....The findings of the A.O on the aforesaid issue are as follows: "5.15 Without prejudice to above. In assessee own submission that the assessee has purchased shares of M/s. Dristi supplies Pvt. Ltd and made the payment of Rs. 2,75,000/- on 06/08/2011. Then how the assessee was given copies of shares certificate on 13/11/2010 and his name was taken on the share certificate on 30/11/2010. This again shows that the assessee transaction is a sham transaction. 5.16 Further, when the assessee pays Rs. 2,75,000/- on 06/08/2011 for purchase of M/s Dristi supplies Pvt. Ltd (assessee himself stated and provided copy of bank statement for the proof). Also D'mat account of the assessee also provides that shares of M/s Dristi supplies Pvt. Ltd wer....
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....peal before the first appellate authority, the Ld. CIT(Appeals)/NFAC dismissed the appeal of the assessee observing as follows: "5.1 I have considered the material on record including the assessment order, grounds of appeal and submissions filed by the appellant and the following are findings. 5.2 The main issue in the appeal is related to the bogus Long Term Capital Gain for trading of shares in Quest Financial Services Ltd. which are rotated through M/s. Maa Vasnavi Udyog & M/s Bhakti trading Co. in FY 2012-13. During the assessment proceeding the AO found that the appellant had purchased 550 shares of M/s Dristi supplies Pvt. Ltd. for Rs. 2,75,000/-. The name of the assesse on share certificate was taken on 30.11.2010. Thereafter, M/....
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....as been provided with 49,500 shares of M/s Quest financial services Ltd price per shares of which is 74.30 on 20/10/2011. The value of which transaction out to be Rs. 36,77,850/-. There is no basis of providing 49500 shares of M/s Quest financial services Ltd. Therefore the process itself is a sham. In amalgamation no of shares provided is on the basis of value of shares. Here the assessee failed to provide why he was provided with shares worth Rs. 36,77,850/- in lieu of another shares of Rs. 2,75,000/-. Further the assessee sold these share in Rs. 82/- per shares on 08/06/2012 in Rs. 40,51,063/- and claimed L.T.C.G of Rs. 37,76,063(4051,063 -2,75,000). From the above it is clear that the assessee Shri Brijmohan Prasad Gupta has been prov....
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....e of such shares. The AO has rightly justified in making addition of Rs. 37,76,063/-. 6. In the result, the appeal of the appellant is dismissed and the action of the AO is upheld." 4. I have carefully considered the facts on record and submissions of the parties herein. The addition had been made u/s.68 of the Act on account of bogus LTCG claimed by the assessee and as per facts of the case emanating from the assessment order, the assessee had acquired 550 shares of M/s.Dristi Suppliers Pvt. Ltd. There was an amalgamation of M/s. Dristi Suppliers Pvt. Ltd. to M/s. Quest Financial Services Ltd. and post this amalgamation, the assessee received 49500 shares. There is detailed discussion in the assessment order where the A.O had brought th....